No one appears to be better qualified to breathe life into a Qui Tam claim than Tony Dewitt – the respiratory therapist- turned-attorney who filed the Rigsby sisters’ Qui Tam claim against State Farm.
Author of Is the Whistle Clean – An Examination of the Ethical Obligations of Attorneys in Filing False Claims Act Lawsuits and Citiizen Attorney Generals and the False Claims Act, Dewitt is an attorney with Bartimus, Frickleton, Robertson & Obetz of Kansas City, Missouri
With Dewitt’s full article linked above, what I’ve attempted to do in this post is link a few frequently heard questions and comments to related text.
Why would attorneys from Missouri have been in the trailer when the Rigsby sisters [the relators] meet with Dickie Scruggs?
The Act provides for nearly nationwide venue and jurisdiction
The Rigsby sisters stole State Farm documents.
Can a qui tam relator, who remains employed, ask his attorney for advice about what documents to take with him? This would seem to violate the ethical rules and the spirit of the discovery rules in federal court. However, where the case is not on file, and the attorney is merely investigating, there is nothing to prevent the attorney from examining documents obtained by the relator where the attorney has not directed the relator to obtain the documents, but merely looks at what the relator has already obtained.
They must not have a good case, the Justice Department hasn’t intervened
Qui tam lawsuits are defended frequently by larger firms located in Washington. These firms frequently exercise considerable efforts to shut down the Department of Justice, or to convince them to decline intervention. The rationale is simple. While the Department of Justice can probably out-spend and out-investigate even the largest of law firms, where the Department of Justice is not carrying the ball, the defense attorneys can make the qui tam action prohibitively expensive.
State Farm says the Rigsby sisters weren’t employees.
Medicare claims presented through third party intermediaries have been held to be claims.
How much would it cost State Farm is the court rules in favor of the Rigsby sisters?
The recovery is for three times the amount of the damages sustained by reason of the fraud, and includes a civil penalty between $5,000 and $10,000 for each false claim.
The impact of the civil penalty on false claims recoveries is impressive. If a health care provider were, for example, to over bill only one dollar for one thousand laboratory tests, the civil penalty could exceed ten million dollars.
One final comment – this my opinion – once we see Dewitt’s response to motions State Farm filed this week, I believe we will see various events following Katrina in a different light.
Nowdy you have certainly been researching your Qui Tam. Excellent post that answers many of the questions we have been getting and also seeing on the net.
Qui Tam, like wind-water litigation (and construction accounting) seems like a true specialty. I wonder from readng State Farm’s moitons today if their lawyers understand that because their arguments seem pretty thin to my non legal mind.
sop
One way to tell Qui Tam is a specialty, Sop, is that there’s not a lot to research – suggesting it’s even more specialized than RICO. Also, Dewitt pointed out that most Qui Tam cases settle; but, I’m not certain how many are this large.
Obviously I don’t know what their lawyers are thinking – or if that matters. I wonder if anyone at State Farm is thinking about the damage their defense is doing to the company’s longterm reputation.
You’re the finance expert but it seems to me that history is going to show Katrina led to major change in the insurance industry – the kind of unexpected change that systems are designed to resist.
If that’s correct, we should soon see some of the smaller companies making cutting edge changes. Leading change is definitely the best position to be in – particularly with the other things at play in finance right now.